Honda bets on Indian two-wheeler market

Japanese automaker Honda Motor's two-wheeler subsidiary in India, Honda Motorcycle & Scooter India Private Limited, which yesterday unveiled plans to build its second plant in Rajasthan (See: Honda to build Rs450-crore motorcycle plant in Rajasthan) to boost it motorcycle production in India, is acquiring approximately 240,000 square meters of land within the Tapukara Industrial Area, near Bhiwadi for the plant. 

The Rajasthan plant, which is approximately 40km from the company's existing plant at Manesar in Haryana, is scheduled to become operational in the second half of 2011 with annual production capacity of 600,000 units.

The plant will supplement  the company's ongoping capacity expansion  efforts at its existing plant at Manesar in  Haryana, which involves raising the current 1.25 million unit capacity to 1.55 million by the end of this month after the recent openiong of its third assembly line, and a further expansion to 1.6 million units, scheduled for next year.

Honda is betting on volume growth in the country, which is currently the world's second largest motorcycle market behind China.

Industry-wide motorcycle sales in India reached 8.8 million units in 2009, up a healthy 19 per cent compared to 2008 and the company has seen steady sales growth in the last nine years that it has been operating in India (it was established as a wholly-owned two-wheeler production and sales subsidiary of Honda in 1999 and began production in 2001).

 The company curently makes Activa, Aviator, Dio, CBF Stunner, Shine and Unicorn models. Despite an almost two-month long labour strike that was resolved in October 2009, its sales were 1.1 million, up 11 per cent compared to 2008 (See: Honda reaches new deal with union; full production resumes).